(Reuters) - U.S. advertising company Omnicom Group Inc (OMC.N) kept its full-year sales growth forecast unchanged after reporting better-than-expected quarterly profit, disappointing investors and raising concerns about ad spending.
Omnicom and other traditional advertisers have been losing ground to internet companies Facebook (FB.O), Alphabet’s Google (GOOGL.O) and digital marketing specialists that track and target individual clients via their smartphones.
Additionally, a slowing global economy and trade tensions are also expected to crimp ad spending around the world.
“In terms of international growth...the uncertainties that exist because of geopolitical decisions will have some impact on what goes on with our clients in spending,” Omnicom Chief Executive Officer John Wren said in a post-earnings call.
For full year, the company continues to expect organic sales growth of 2% to 3%.
Morningstar analyst Ali Mogharabi said the forecast “may have disappointed some that were expecting a bit more optimism.”
The company’s total revenue fell 3.6% in the second quarter, weighed by a stronger dollar. However, organic revenue - a widely watched measure that excludes fluctuation in foreign exchange rates and mergers - rose 2.8%. Analysts on average had expected a 2.72% gain, according to five analysts polled by Refinitiv IBES.
Net income attributable to Omnicom, counted among the world’s “Big Four” traditional ad companies, rose nearly 2% to $370.7 million, or $1.68 per share.
Analysts on average had expected a profit of $1.61 per share.
Revenue fell to $3.72 billion from $3.86 billion, in line with analysts’ average estimate.
Shares of the company were down 2.7%. They have risen nearly 12% this year.
Reporting by Arjun Panchadar in Bengaluru; Editing by Shinjini Ganguli